Contract Approval Process and Rules

Last Updated: January 18, 2024 14:34

Introduction

When creating new or editing existing contract agreements, you have the ability to set limitations to length, deposit, discount, and notice periods. You can also define which of your Teammates can or cannot approve a Contract.

If any of the limits have been exceeded and the user setting up the contract does not have approver permissions, they would only be able to send the contract for approval to a preselected group of users instead of Add and Approve.

Activate the Approval Process

To activate this feature, please go to Settings/Platform Modules/Contracts and enable Approval Process.

Note: Although unified, some of the contract approval rules have different behavior for the different types of contracts.

Approvers and Rules

Enabling the Approval Process will open additional settings:

Approvers - Use this field to select Teammates that will have the permission to approve contracts.

Note: Once you enable the Approval Process setting, you can easily review details for the approver’s actions. All contracts could be filtered and exported into a .CSV file. In it, you can find the following information related to each contract - Approver’s name / Approver’s role / Approver’s stamp.

Approval rules:

Require approval when the discount exceeds XX%.

This option is applied to each of the contract types as follows:

- License and Lease Agreements: When adding a resource and A) the entered price is cheaper than the list price with more than XX% or B) the selected discount option exceeds XX% - the user creating or editing the contract will have to send it for approval.

Note: For these contract types, the rule only applies to resources’ price and does NOT apply to plans’ price. In addition, if a resource’s price is 0, it will trigger the rule and prompt the user to send the contract for approval.

- Membership Agreements: As membership agreements do not have resources, this rule applies to the selected plans in the same way it is applied for the resources in the other agreements.

Note: Membership agreements can be created without an End date. If the agreement does not have an End date, the rule will not apply regardless of the price.

Require approval when the notice period is less than XX month(s).

This option works equally for all contract types and will trigger when a user sets a notice period which is less than the XX months defined in the rule.

Note: As opposed to the previous rule, here the Membership Agreement's End date does not affect the behavior, regardless if an End date has been set or not.

Require approval when the contract length is more than/less than XX month(s).

These two rules are applied to each contract type as follows:

- License and Lease Agreements: When either of these options is enabled and the contract length does not apply to the limitations, the user creating or editing the contract will be prompted to send it for approval.

Example: A 12-month contract starting on 20 Sep 2020 will end on 19 Sep 2021. If the minimum rule has been enabled and the contract’s End date is changed to 18 Sep 2021 instead, the rule will be triggered. Similarly, if the maximum duration rules have been enabled and in the scenario above the contract end date is set to 20 Sep 2022, the rule for the maximum duration will be triggered.

- Membership Agreements: The rules here are applied identically to License and Lease Agreements, except when a Membership Agreement does not have an End date. In this case, the two approval rules will not be triggered.

Require approval when the deposit is less than XX times the highest step for an office.

This rule is applied to each contract type as follows:

- License and Lease Agreements: Similarly to the discount rule, this one is applied only to the steps of the resources (if any plans are added, their step price/deposit does not trigger this approval rule). This rule takes an office’s step’s highest price (if more than one) and compares it to the deposit to be held for the office.

The approval rules use the list price of the resource you're assigning in the contract. If you're manually editing the price of the step without applying a discount you won't need to account for that. If, however, you're applying a discount you'll need to account for that.

Examples:

- The rule states that Contracts need approval if their deposit is less than 2 times the highest step of an office. If the list price of the resource is 550$/month and in the steps, you discount the resource to 450$/month (a deposit that is less than 2x550$) the contract will require approval even though it's discounted.

- The rule states that Contracts need approval if their deposit is less than 2 times the highest step of an office. If an office’s step’s price is 500$, and the deposit is 999$, the rule will be triggered. If the deposit amount is changed to 1001$, the rule will no longer be triggered. If another step is added, and its cost is 600$, the rule will trigger once more, as the required deposit now will have to be 2 times 600$, which is 1200$ minimum.

- Membership Agreements: This rule applies to membership agreements identically to the other contract types with the core difference that it works for plans and not offices. If enabled, the rule is applied even when the membership does not have an End Date.

Note: If the user setting up the new contract or amending an existing one is an Approver and any of the rules are triggered, they would still see the warning messages. However, they are only informative and they will be able to Add and Approve the contract agreement.

Require approval when an Addendum is added.

This option requires approval for contracts with an added addendum so that any deal-specific terms can be supervised before it is sent for signing.